Here Are a Few Things to Think About…

1). Who is and who should be ultimately responsible when it comes to a failed home loan? Some feel as though it’s entirely the borrower’s fault — they should have known better.

“There’s much regarding the borrower-is-responsible view which is attractive, including simplicity,” writes financial expert Peter Miller. “That said, borrower responsibility should be seen as a nuanced concept, one which requires a look at both principle and circumstances.”

Miller goes on to examine quite a few circumstances that help provide a balanced approach to ultimately deciding who’s at fault and who isn’t.

2). With rental vacancies falling and rents increasing in certain areas of the country, should existing and would-be renters be worried?

The national apartment vacancy rate stood at 7.8% at the end of June, according to Reis Inc., a New York real-estate research firm. That was down from the 8% vacancy rate during the first quarter, which was the highest vacancy rate in 30 years.

Rents gained by 0.7% during the seasonally strong April-to-June period, the biggest quarterly gain in two years…

Some experts say that while the rental perks are likely to all but disappear, significant rental increases aren’t likely to happen until the job market improves:

The numbers mean that the renters’ market of the past two years, where landlords showered perks such as two or three months of free rent to entice tenants, is drawing to a close. The balance of power hasn’t swung “completely back to owners right now,” says Hessam Nadji, managing director at real-estate firm Marcus & Millichap. “But we’re well under way to see that balance shift back.”

3). Are we prepared for the possibility of a double-dip-housing recession?

We’ve already seen what the expiration of the homebuyer tax credit has done to home sales, but what if home prices follow the same trajectory? Stephane Fitch from Forbes writes that may just be where we’re headed:

A second dip is clearly under way in some places, if not across the entire U.S.

Zillow.com, a Seattle-based real estate data provider, is preparing to release figures for May and expects them to show a 1.7% decline in home values nationally through the first five months.

New York-based data firm Radar Logic, which tracks values by sifting through housing transactions in the 25 largest U.S. cities, reports that through April 30 values were up 1.9%. It warns, however, that values may have merely received a boost from the spring season (home values typically have their best stretch as the weather warms) and the extension of the first-time-buyer tax credit that expired last month.

The fear of another wave of falling home prices makes us ask this question once again, “Does the housing market need another homebuyer tax credit in order to thrive?”

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog,
which concentrates on the latest developments in the mortgage and housing
markets.